The United States has signalled a possible escalation of economic pressure on Russia, with Treasury Secretary Scott Bessent saying coordinated US–EU measures — including tariffs or secondary sanctions on buyers of Russian oil — could drive the Russian economy towards collapse and bring Moscow to negotiations.
He described the situation as a race between the staying power of Ukraine’s armed forces and the resilience of Russia’s economy. His comments followed Russia’s largest air assault of the war, which set a Kyiv government building ablaze on Sunday.
President Donald Trump, who had earlier prioritised talks, said he is ready to move to a “second phase” of Russia sanctions, though without detailing the instruments or timetable. The White House has separately updated its tariff framework via executive order, but has not yet published a specific Russia package under that authority.
Bessent’s suggestion targets the network that has sustained Russia’s oil revenues since the EU embargo and G7 price cap redirected flows east. Independent tracking shows China and India have taken the bulk of Russia’s crude exports in recent months, while Brazil has emerged as a notable buyer of refined products. In June, the Centre for Research on Energy and Clean Air estimated that China accounted for 47% of Russia’s crude exports and India 38%, with Brazil purchasing about 12% of Russian oil products; July analysis urged tighter rules on fuels refined from Russian crude.
The administration has already increased tariffs on some imports from India, citing its continued purchases of Russian oil. New Delhi has publicly indicated it will continue to buy Russian crude despite the US measures, highlighting the limits of tariff pressure on large energy importers.
Brazil’s reliance on imported diesel complicates any push to curb flows of Russian refined products into Latin America. Industry reporting in late July noted Brazilian market exposure to Russian diesel, underscoring the potential domestic cost of any sanctions that targeted those supplies.
A move towards secondary sanctions — penalties on third-country entities that trade in or finance Russian oil — would represent a material shift. Such measures would aim to constrict shipping, insurance, and payment channels beyond the G7’s current price-cap enforcement. They would also carry risks: major buyers could seek alternative arrangements outside Western financial systems, while global fuel prices might rise if supplies are abruptly curtailed. Bessent nevertheless argued that combined US–EU action could be decisive.
Europe’s role will be central. The EU has progressively tightened its Russia sanctions packages and pursued enforcement against price-cap evasion, but has stopped short of broad secondary sanctions. Reporting on Sunday indicated that allies plan talks on closing “all channels” for Russian energy trade, though no official EU proposal has been published.
Any escalation would come amid sustained Russian strikes against Ukrainian cities. Kyiv officials said Sunday’s attack — involving cruise missiles and drones — caused multiple fires in the capital after a direct hit on a government complex. The timing of Bessent’s remarks, immediately after the strikes, reinforced the linkage between the battlefield tempo and the economic front.
Key questions now concern scope and enforcement. A tariff-only route would be politically simpler for Washington but more porous, as buyers can reroute trade and some exporters can discount. Secondary sanctions would have sharper bite but require extensive carve-outs and coordination to avoid energy shocks. Both approaches would demand close alignment with European partners and careful calibration towards major importers in Asia and Latin America.
Market data suggest Russia retains sizeable outlets for its crude and products despite existing measures. China’s intake of Russian oil has remained elevated through 2024–25, while India has repeatedly emphasised price and supply security in its purchasing decisions. Altering these flows would likely require either a far more aggressive enforcement regime or incentives that offset the economic rationale for current buyers.
For Ukraine, the outcome of this policy debate is immediate. If secondary sanctions meaningfully compress Russia’s energy earnings, the fiscal room for Moscow’s war effort could narrow. If they do not, the “race” Bessent described will continue to hinge on military assistance to Kyiv and the durability of Russia’s redirected energy trade.
